Case Law Summaries

Mroczkowski v. FedEx Ground Package System, Inc.

ARBITRATION — Even if an arbitration clause is a contract is not applicable to the disputed issue, if a party voluntarily participates in arbitration, then the participation itself constitutes an agreement to arbitrate which need not be based on the inapplicable, prior written agreement.

An individual entered into an employment contract with a national overnight delivery company as a pickup and delivery driver. The contract provided that all claims relating to termination of the agreement had to be submitted to arbitration. When the delivery company terminated the employee’s contract, the employee initiated an arbitration proceeding. He then withdrew from arbitration before a decision had been rendered on the merits, claiming the fees were “prohibitive.” At no time during the proceedings did he contest the validity of the arbitration clause or object to the arbitrator’s authority to decide the dispute. Two years later, the ex-employee sued in federal district court to contest the validity of the arbitration clause, seeking damages for breach of contract.

The Court dismissed the complaint and directed the parties to arbitrate, holding that an agreement to arbitrate is a matter of contract and is enforceable to the same extent as any other contract. It noted the strong federal policy in favor of the resolution of disputes through arbitration. Thus, the Court directed the parties arbitrate because there was a valid agreement to arbitrate. It concluded that a party who voluntarily submits a dispute to arbitration, without contesting the dispute’s arbitrability, as in this case, indicates, through its conduct, a clear intent to submit to arbitration. Further, it found that a party is bound by its agreement to arbitrate even where the arbitration is abandoned before the arbitrator renders a decision on the merits. Thus, it held that the former employee waived his right to contest the arbitration when he voluntarily participated in the arbitration. Further, the Court agreed with the delivery company that the former employee’s conduct created an agreement to arbitrate. Consequently, because the agreement to arbitrate was based on the former employee’s conduct, and not as a result of an arbitration clause agreed-to by the parties in a prior contract, the limitations on arbitration found in the other contract’s arbitration clause did not apply to the arbitration of this dispute.